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Builders Speed Up Townhome Construction

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Townhouse construction continues making gains as buyers’ appetites once again increase for this type of single-family attached housing. Over the last four quarters, ending with the first quarter of 2018, townhouse starts were 7 percent higher than the prior four quarters. Townhouses accounted for 21,000 starts during the first quarter of 2018.

The market share of new townhouses now stands at 12.3 percent of all single-family housing starts, according to an analysis from the National Association of Home Builders. Over the last two decades, the peak market share for townhome construction was reached in the first quarter of 2008, when the share was at 14.6 percent of total single-family construction.

“I expect future gains in the share as townhouses are a useful bridge from rentership to homeownership for younger prospective home buyers in high-cost markets, among other market opportunities,” Robert Dietz, the NAHB’s chief economist, writes at the builder association’s Eye on Housing blog. “The long-run prospects for townhouse construction are positive given the large numbers of homebuyers looking for medium-density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.”